Aug 28, 2022Ed. Note: This article was previously posted at IoP Journal.
Food waste presents a high cost for the global economy, in addition to being a major contributor to climate change, biodiversity loss and pollution. This is a difficult situation for grocery retailers. Grocers want to meet demand, and thus they must stock enough products. If they do not, then the risk of losing customers to a competitor increases. Forecasting the right demand, however, is not so simple, and ordering more products than customers need can lead to rotten food and incurred losses.
The moral aspect of food waste is equally worrying, for not all people on this planet have enough to eat. They could be fed with the food that is wasted, couldn't they? Managing food waste at a grocery store is all about finding the perfect balance. Grocers want to deliver a promise to their customers about having the freshest food available, as well as the best in-stock rate, with minimized waste.
To support these needs, one aspect of our company's solution focuses on an automated grocery store replenishment system. The idea is simple. Our solution provides visibility regarding the exact number of goods in store, as well as the remaining shelf life for each item. Companies seek knowledge of delivery frequencies and product shelf lives, so we fight against food waste with our capability of offering real-time item-level tracking of goods, enabling the optimization of products.
With our solution, partners can track the current capacity levels of goods at smart stores and the best-before dates of each item, along with the current capacity levels of goods at warehouses. Having this data available allows our grocery partners to apply dynamic pricing to support sustainability. Our technology-enabled smart stores alert themselves when products are running low, and they send a signal independently to the warehouse for replenishment. This provides grocers with an opportunity to price products higher if they so desire.
Alternatively, if products are approaching their best-before dates or have been on the shelf longer than anticipated, a grocer can price those items lower. Goods that would have been thrown away now have a better chance of finding their way to consumers' hands. This type of dynamic pricing approach with item-level tracking capabilities generates productivity increases, leading to higher profits and reduced waste.
Everything is done from one place, our Blockster platform, store by store. As a next step toward strengthening the waste-management capabilities of our solution, the goal will be to apply more artificial-intelligence and machine-learning algorithms. In so doing, we want to offer automatic best-selling product lists to meet consumer needs over a relevant time horizon, while enabling grocery stores to independently reduce the price of grocery items based on the amount of time they spend on store shelves.
Why should a person pay the same price for products that expire in two day and those that do so in seven days? Our waste-management vision is clear: offer the right products at the right time and at the right price.
Henna Hynynen is the head of partnerships at Blockstore Group.
